Suppose an investor earned a yield of 9.8 percent p.a. on a bond paying coupons quarterly. What is the effective annual yield (EAY) on this investment?
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- What is the effective annual yield on this investment on these financial accounting question?What is the yield to maturity on these financial accounting question?Assume you have a bond with a semi-annual interest payment of $50, a par value of $1 comma 000, and a current market price of $870. What is the current yield of the bond?
- Current yieldIn a bond portfolio, the following are the present values of all cash flows by annual period: Year PV Cash flows (millions) 1 14.3 2 13.2 3 15.3 4 10.5 5 18.4 What is the percentage contribution to duration of the year 3 cash flows? Enter answer in percents.The return an investor earns on a bond over a period of time is known as the holding period return, defined as interest income plus or minus the change in the bond's price, all divided by the beginning bond price. a. What is the holding period return on a bond with a par value of $1,000 and a coupon rate of 7.5 percent if its price at the beginning of the year was $1,070 and its price at the end was $960? Assume interest is paid annually. Note: Negative value should be indicated by parenthesis. Round your answer to 2 decimal places. Holding period return %
- A bond has a 6.5% yield to maturity and coupons paid semiannually. What is the bond's effective annual yield (EAY)?еВook Problem Walk-Through Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,200. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % Would an investor be more likely to earn the YTM or the YTC? -Select- -Select- ent yield and to Table 7.1) Round your answer to two decimal places. b. Since the YTM is above the YTC, the bond is likely to be called. Since the YTC is above the YTM, the bond is likely to be called. Since the YTM is above the YTC, the bond is not likely to be called. Since the YTC is above the YTM, the bond is not likely to be called. Since the coupon rate on the bond has declined, the bond is not likely to be called. I. If the bond is called, the capital gains yield will remain the same but the current yield will be…6. For an investor who plans to purchase a bond maturing in one year, the primary consideration should be ________. A) retained earnings B) face value C) yield to maturity D) net income
- Assuming annual interest payments and a principal value of $100, what is the value of a 5-year 6.4% coupon bond when the discount rate is i) 4.6%, ii) 6.4%, and iii) 7.6% ? Show that your results are consistent with the relationship between the coupon rate, discount rate, and price relative to par value.Assume that the real risk free rate is 2% and the average expected inflation rate is 3% for each future year. The default risk premium and the liquidity premium for bond x are each 1% and the applicable Maturity Risk premium is 2% what is bond x’s interest rate. Round to 2 decimal placesAssume investors are indifferent among security maturities. Today, the annualized 2- year interest rate is 2.20 percent, and the 1-year interest rate is 2 percent. What is the forward rate according to the pure expectations theory? O 2.25% O 2.00% O 2.40% O 2.20%
